Shell seeks best drilling sites in Butler, Lawrence gas fields

We are currently undergoing updates to our site and are working to improve your experience on all devices that you use throughout your day. If you should find a page or a story that is not working correctly, please click here.

Thank you for your patience,

TribLIVE.com Team

Bill Langin is playing a giant game of Battleship in Butler and Lawrence counties, using a drill rig to plot targets in the Marcellus shale.

Langin is in charge of Appalachian exploration for Royal Dutch Shell plc, which holds the mineral rights to about 100,000 acres in the two counties and more land in northern Pennsylvania. About a year ago, Shell bought East Resources Inc. of Marshall for nearly $5 billion, and the company just finished drilling its first well in this part of the state.

Langin, 34, of Moon is not a wildcatter looking to drill in the sweetest spots he can find. His job is to drill in outlying areas, looking for data, zoning in on targets he cannot see. He asks: Where can Shell drill in its Appalachian holdings and profit?

"Sometimes (the testing) works; sometimes it doesn't. It's kind of sketchy, so the only way you can really gauge the production is once you drill a well," said Langin, a Luzerne County native and Ivy League graduate who spent most of his career working on projects in the Gulf of Mexico and off the shore of Brazil.

His team of 12 geologists and engineers does radiation testing, taking thousands of feet of core samples from underground and reviewing production data from other wells. To answer questions that data cannot, they drilled an 8,600-foot exploration well in Little Beaver, Lawrence County. Its rig is 142 feet tall, twisting thousands of feet of steel pipe into the earth. At the bottom, the well reaches out 5,000 feet sideways into the next town.

The work in this fringe area of the Marcellus shale fairway is part of escalating drilling in Butler and Lawrence counties. Shell also is tapping into the Utica shale, a gas-rich layer that is deeper and extends beyond the Marcellus formation.

Shale gas extraction in Pennsylvania remains under a spotlight, and corporations such as Shell, Exxon Mobil Corp. and Chevron Corp. moved into the region a year ago, buying big stakes. The companies have different ways of estimating potential quantities of gas, experts said.

"They're not just looking at their own land. They're evaluating all of it," said Anthony Ingraffea, professor of civil and environmental engineering at Cornell University. "Eventually it's going to be the last four or five (companies) standing, and Shell plans to be one of those."

Shell plans to bring in a drill rig dedicated to the region next year. If things go well, it could add nine more. The company will spend two to four years determining how rich the land is with gas, and whether to drill here before tapping other oil and gas fields around the world, Langin said.

Shell continues to lease land in Butler and Lawrence counties, adding about 30,000 acres to the 70,000 it bought from East last year, Langin said. Its big-picture exploration methods not only help the company gauge and manage holdings, but help its officials to decide where to lease land, said Badie Morsi, director of the University of Pittsburgh's Petroleum Engineering Program.

It's difficult to determine how much gas the Marcellus shale will produce in a given location. Pressure and natural fractures vary, Morsi said, meaning drillers can only approximate reserves.

"It's very difficult to make generalizations," Morsi said. "It depends upon your luck. You're shooting in the dark at 10,000 feet. It's not a known thing where you go in and grab it."

It's common for multinational corporations such as Shell to take the time for advance work, Morsi said. If they drill edge areas first, the production there can indicate how much gas is inside the circle, he said.

That helps companies to plan efficiently for infrastructure costs, such as pipelines and compressor and processing stations, Langin said. They know the gas is there, but they must figure out how much is there and how hard it is to extract -- then they can determine how high gas prices must be before drilling would be profitable.

Texas-based Range Resources also has holdings in Butler County. It tapped the first successful Marcellus well more than six years ago in Washington County, and being first on the scene brought competitive advantages, spokesman Matt Pitzarella said.

Instead of expanding in new territory, the company is concentrating on Washington and Lycoming counties, where shale formations hold gas and other marketable resources, Pitzarella said.

Range touts research from global financial services firm Morgan Stanley that says those Marcellus areas could turn a 10 percent initial profit, even with natural gas prices as low as $3 per million British thermal units (Btus) on the New York Mercantile Exchange. Natural gas futures for August delivery closed Friday at $4.2 per million Btus.

"It's not that we don't like those areas (north of Pittsburgh), but we're focused on where we believe our highest rate of return is," Pitzarella said.

You are solely responsible for your comments and by using TribLive.com you agree to our
Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent
via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.